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Nigerian economists as well as financial experts have disagreed with the World Bank’s recommendation that Nigeria should forge ahead with the economic reform programmes and measures for 10 or 15 years before reaping the beenefits.
Recall that the Senior Vice President of the World Bank Group, Mr Indermit Gill had in Abuja argued that the Federal Government was on the right track with its economic reform.
He added that the President Tinubu could move ahead with the reform for the next 10 or 15 years to be able to transform the economy.
The World Bank had also claimed that the economic reforms of the federal government over the last year were yielding positive results, a development that has seen Nigeria’s fiscal deficit shrink to 4.4 percent in the first half of 2024 (H1’24) from 6.2 per cent in the same period last year (H1’23).
The key reform programmes and measures include the removal of petrol subsidies, devaluation of the local currency by free-float measures, raising of tariffs on utilities especially electricity, and raising of taxes, among others.
The global bank recommendation came amid the pains of rising cost of living and declining standard of living in Nigeria.
Reacting, Nigerian economic experts criticised the Nigerian public policy executives for accepting the World Bank report without consideration based on the peculiarity of Nigeria's economic ailments.
Former President, Chartered Institute of Stockbrokers, CIS, stated: “Managing the economy of a country such as Nigeria cannot be all about a balanced budget and nice sounding financials, it must have a human face. While the reforms we’ve seen might be considered necessary, it’s clear that the bulk of the negative impacts are being borne by the most vulnerable within the society.
"If the reforms are not paced and efforts made to ameliorate the negative impact they might very well not achieve their intended purpose due to lack of public consensus.”
Also, Public policy analyst, Clifford Egblmeade said, “The advice from the World Bank Vice President, Indermit Gill, that Nigeria must sustain the Tinubu administration’s reforms for the next 10 to 15 years has sparked significant debate. On one hand, the reforms—including fuel subsidy removal and foreign exchange rate unification—are aimed at promoting long-term economic stability and growth. However, the hardship they have imposed on ordinary Nigerians, such as increased living costs and inflation, raises questions about their immediate feasibility and social impact. While Gill argues that reforms are necessary for Nigeria to break free from the legacy of oil dependency and elite capture, it is crucial to note that these same policies have exacerbated the burden on the most vulnerable.
"The World Bank has acknowledged that Nigeria’s oil wealth has historically benefited a small elite, while the ordinary population suffers from structural inefficiencies in the economy. The removal of fuel subsidies, for example, has led to skyrocketing transportation and food costs, further straining already struggling households”.
He added: “In response to the World Bank and the Tinubu administration, it is imperative to stress that while reforms may be necessary for long-term economic transformation, they must be accompanied by comprehensive social safety nets. Vulnerable groups cannot bear the brunt of these policies without adequate support mechanisms in place. The government must prioritize effective welfare programs, job creation initiatives and targeted interventions to shield the poorest Nigerians from extreme hardship. Can Nigerians bear these hardships for another 10 to 15 years without significant improvements in governance and resource allocation? The answer is likely a ‘No’.
“The government must act swiftly to reduce the immediate burden of these reforms by investing in social protection programs and creating avenues for sustainable economic growth that will benefit all Nigerians, not just the elite. Sustainable reforms can only succeed if they are inclusive and equitable, ensuring that the long-term gains are not built on the suffering of the most vulnerable populations” he added.
Also for an analyst and Executive Vice Chairman at Highcap Securities Limited, David Adonri said, “Economic reforms always come with some pains. I do not think that the pain from the current market reform will last for more than two years because the economy will certainly adjust to the new price level. Current reform is targeting the demand side of the economy but there is no strong supply-side effort to close the supply gap, that is the bane of the economy. If the domestic factors of production are mobilized to create a self-sustainable economy, the gains from current reform will be too enormous to imagine because both demand and supply will come to equilibrium”.
